Nippon Steel raises $200M in subordinated loan to refinance 2019 bonds

What's the deal? Nippon SteelDealroom has a profile for this one. Try Dealroom → signed a 30 billion yen (roughly $200 million) subordinated loan on September 8, 2026, the company said. It will draw down the funds on September 11 and use them to redeem public subordinated bonds issued on September 12, 2019.

Why the structure? The loan blends debt and equity features, including an option to defer interest payments, a redemption period running to September 11, 2061, and subordination in liquidation or bankruptcy. Its liability aspects avoid diluting stockholders.

Why it matters: Nippon Steel expects rating agencies — Rating and Investment InformationDealroom has a profile for this one. Try Dealroom →, Japan Credit Rating AgencyDealroom has a profile for this one. Try Dealroom →, and S&P Global Ratings JapanDealroom has a profile for this one. Try Dealroom → — to treat 50% of the funds as equity for rating purposes. Early repayment is possible from September 11, 2031, onward.

What's the endgame? The company is pursuing annual underlying consolidated business profits of ¥1 trillion or more and global crude steel production capacity of 100 million tons or more. It plans roughly ¥6 trillion in capital and business investments over the next five years.

Nippon Steel says it already holds sufficient equity capital but wants to diversify its financing. That means leveraging operating cash flows and asset sales alongside debt to fund the next phase of its growth strategy.

The signal: Rather than issue new equity, Nippon Steel is reaching for hybrid instruments that raise cash and shore up its balance sheet without diluting shareholders. It's a financing playbook aimed at moving quickly on global growth opportunities while keeping ratings intact.

Image credit: Governo do Estado de São Paulo